The Weekly Brief

06-12-2021

Thought of the week

Eurozone prices rose at their fastest rate in November since the bloc was first formed in 1999, with headline inflation hitting 4.9% year on year. While higher energy prices made a large contribution, core inflation was also up strongly at 2.6% year on year. On a regional basis, Germany saw the largest upside surprise among the major nations, with November’s headline inflation rate reaching an all-time high of 6.0% year on year. Last month's print may well mark the local peak in inflation, as the base effects from energy prices and German VAT changes start to ease. Yet the latest data print could still provide further encouragement for the hawks on the European Central Bank’s Governing Council to push for a more substantial reduction in asset purchases, with the Pandemic Emergency Purchase Programme (PEPP) due to end in March. We explore the next moves for the central banks in more detail in our Investment Outlook 2022.

Eurozone inflation has hit record levels

Eurozone headline and core inflation, % change year on year

JPMorgan_Insights_Weekly_Brief_EN — Source: Eurostat, Refinitiv Datastream, J.P. Morgan Asset Management. Data as of 3 December 2021.

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